China’s economy is slowing down, its exports are alarming, and the foreign trade situation is also worrying.
China’s Ministry of Commerce has acknowledged an outflow of orders and relocation of industries, and foreign capital is constantly being pulled out of the country.
On June 11, Chinese CBN reported that many Chinese orders have flowed out of China in recent years, and foreign trade businesses have been facing various difficulties, such as supply chain interruption and rising costs.
A foreign trade company said that foreign customers canceled its Christmas order in October, with a value of more than 100 million yuan (almost 15 million dollars), because they found suppliers in Vietnam.
Data from China’s General Administration of Customs show a significant slowdown in the country’s exports in the first quarter. However, the sector is expected to grow about 8% in the second quarter.
According to the latest data from China’s National Bureau of Statistics, an index of new export orders has dropped again, indicating that the foreign trade has further weakened.
In the Pearl River Delta and Yangtze River Delta areas, the Covid epidemic has disrupted industrial production orders. In addition, the logistics are not smooth, and raw materials and costs are rising.
Due to the interruption of the supply side, China has been losing overseas orders and customers.
Regarding this issue, Chinese authorities are seeking to fight a war it calls a foreign trade defense.
The State Council of China has drafted 13 policy measures, including promoting the transportation of foreign goods. In addition, some ministries and agencies started to study relevant policies to protect orders and markets.
Li Xingqian is the director of the Department of Foreign Trade under the Ministry of Commerce. In a policy meeting on June 8, he admitted that there is an order outflow and industrial relocation in some industries in China.
Li Xingqian said: “Since the beginning of this year, with the gradual recovery of the production side of neighboring countries, some foreign orders that returned to China last year have flowed out again.”
Wang Shouwen, Vice Minister of Commerce, admitted that the Covid outbreak, the Zero-covid policy, and the epidemic prevention measures had caused various negative impacts and challenges to Chinese companies.
Wang Shouwen said that the ministry is taking measures to retain foreign companies. They include expanding the scale of export credit insurance, especially for small and medium-sized foreign trade companies.
A state-owned bank official in Zhejiang told the 21st Century Business Herald that Chinese exporters mainly engage in small household appliances, textile supplies, bearings, auto parts, and other industries. However, due to epidemic prevention policies at home and abroad, foreign trade orders are flowing out to other developing countries this year.
In addition, despite the yuan’s depreciation, Chinese exporters’ feedback shows they have not felt the expected positive effect.
China’s State Council has admitted that the world’s second-largest economy is in a tough situation.
Premier Li Keqiang presided over a teleconference about market stabilization on May 25. He stressed that efforts should be made to ensure economic growth and that the financial operation should be maintained within a reasonable range.